Ending a four-year dispute, the San Benito Foods tomato cannery
has agreed to pay Hollister a total of $772,000 owed for prior use
of a sewer plant
– about $600,000 less than the city’s original demand.
Hollister – Ending a four-year dispute, the San Benito Foods tomato cannery has agreed to pay Hollister a total of $772,000 owed for prior use of a sewer plant – about $600,000 less than the city’s original demand.
City Manager Clint Quilter announced the agreement Tuesday in a memo to city council members. Both sides view the amount as fair, he said. And Quilter admitted Hollister regrets the hard-line, public stance taken by former City Manager Dale Shaddox, who called for the cannery in August 2003 to pay $1.4 million in debt. That figure is now viewed as largely inaccurate.
Hollister and San Benito Foods have held closed-door talks about the debt amount since September 2003, he said. The two sides didn’t negotiate, Quilter said, and the final amount wasn’t a settlement.
Both sides feel they calculated a fair debt based on the cannery’s use, Quilter said. Cannery management referred comments to an executive at the company’s corporate office in Vancouver, Wash., Jonny Martin. She didn’t immediately return a call Tuesday.
“What we did was spent a lot of time going through each and every bill with them,” Quilter said.
That, however, was long after the discrepancy snowballed during a period from 2000-2003. San Benito Foods uses the city’s industrial sewer plant during its tomato canning season to dispose additional waste. In 2000, Hollister started charging the cannery for upgrades to the plant, a billing increase the company at least partially disputed.
Revenues collected from the cannery for use of the sewage system funnel into an enterprise account that can only be used to maintain and upgrade the sewer plant. So even though Hollister’s facing severe budget shortfalls, the discrepancy served as a debt on the books that could only affect the level of maintenance at the sewer plant.
Now the two sides agree San Benito Foods shouldn’t be responsible for improvements to sewage ponds 5 and 6, according to city officials. Shortly before the 2000 canning season, Hollister began using those ponds to offset dwindling capacity at its domestic plant, where it treats residential waste.
As part of the recently reached agreement, Hollister lowered the debt by $203,000, an amount determined as the city’s share for operations and renovations at those two locations. Hollister lowered it by another $168,000 because the city charged San Benito Foods for “materials and services” outside of the summer canning season, according to the memo.
San Benito Foods and Hollister also agreed to squelch the city’s prior request for $112,000 in late fees. That amount – a 10 percent levy – carried no justification, Quilter said.
“It has been determined that these fees are not required or supported by ordinance, and were applied in a random manner,” said Quilter in the memo.
Instead, Mayor Tony Bruscia suggested Hollister charge San Benito Foods an amount the city would have earned by investing the missing funds. That amount, which the cannery agreed to, came to $8,000.
Bruscia and other city council members were pleased Tuesday that Hollister and San Benito Foods reached a resolution.
Bruscia, like Quilter, regretted the former city manager’s aggressive approach.
“It think probably it would have been much wiser if (Shaddox) had met with them first and really resolved exactly what they owe and why,” Bruscia said.
He also pointed out that council members weren’t responsible for keeping track of late fees and other “micromanagement issues” leading to the inaccurate debt figure. Now, Bruscia said, he trusts the city staff has realized a fair conclusion.
Councilman Robert Scattini reiterated his stance that too many city employees had been “sleeping on the job.” He called the cannery debt dispute another stumbling block.
“And these are the things that really bother me a lot,” said Scattini, who joined the council in January 2003, “people not being accountable for the jobs.”
Kollin Kosmicki covers politics for the Free Lance. Reach him at 637-5566, ext. 331 or [email protected].
